At the inaugural “Impact Investment in Bangladesh Summit” in November, it was announced that impact investing in the Bangladesh has attracted $1 billion and is maturing, with investors looking for better ways and tools to measure impact.
Significance
According to the Financial Express Bangladesh, the country has the third most active impact investing market in South Asia after India and Pakistan.
One result, according to the country’s Finance Minister Muhith, “poverty rate drastically fell to just 22 percent in 40 years from 75 percent.”
Deployment through DFIs
The primary artery of impact investing has been through Development Finance Institutions (DFIs) which have contributed over $834 million while other impact investors have invested $121 million.
DFIs are specialized development banks or subsidiaries set up to support private sector development in developing countries like Bangladesh. They are usually majority-owned by national governments and source their capital from national or international development funds or benefit from government guarantees. This ensures their creditworthiness, which enables them to raise large amounts of money on international capital markets and provide financing on very competitive terms.
Most of the impact investments in the country are being deployed via DFIs to sectors such as information and communication technologies, energy, financial services, agricultural/food processing, infrastructure, micro-finance and manufacturing.
